Wipro Q4 FY22 Conference Call Highlights | Strong top-line growth but attrition continues to impact margins, double-digit growth expected in FY23

• Q4FY22: Gross Revenue was ₹20,860 Cr ($2.7 billion), an increase of 28.4% YoY. IT Services Segment Revenue was at $2,721.7 million, an increase of 3.1% QoQ and 26.4% YoY. IT Services Operating Margin for the quarter was at 17.0%, a decrease of 60 bps QoQ. Net Income for the quarter was ₹3,090 Cr ($406.9 million), an increase of 4.0% QoQ and 3.9% YoY. Operating Cash Flow was at ₹2,330 Cr ($307.3 million), which is 75.5% of Net Income.
• FY22: Gross Revenue was ₹79,090 Cr ($10.4 billion), an increase of 27.7% YoY. IT Services Segment Revenue was at $10,355.9 million, an increase of 27.3% YoY. IT Services Operating Margin for the year was at 17.7%, a decrease of 254 bps YoY. Net Income for the year was ₹12,220 Cr ($1,610.5 million1), an increase of 13.2% YoY. Operating Cash Flow was at ₹11,080 Cr ($1,460.4 million), which is 90.7% of Net Income.
• In terms of geographies, Europe led the growth (+36% YoY) as revenue from Germany grew 1.5x during the quarter, followed by America (+28% YoY). APMEA (Asia Pacific, Middle East and Africa) continued to record double digit growth (+14% YoY) as ACV (annual contract value) grew 22%.
• Human resource: Closing strength of employees for IT Services was at 243,128, an increase of 45,416 employees on a YoY. High Attrition rate (~23.8%) as on Mar-22 as compared to (~22.7%) as on Dec-21. Amidst the ongoing supply side constraints, hiring of fresh talent is expected to double in FY 23 and the frequency of promotion will be increased to quarterly for at least 70% of the workforce in junior band.
• Closed 37 large deals resulting in a TCV of over $2.3 billion in FY22. Added two customers to the over 100 million account category and three new customers in the over $50 million account category in Q4FY22.
• Company would continue to focus on verticals like BFSI, Retail, Energy & Utilities and would also expand its relationship with hyperscalers in order to provide better services to its clients.
• Q1FY23 Guidance: Revenue from IT Services business to be in the range of $2,748 million to $2,803million*. This translates to a sequential growth of 1% to 3%. Growth for FY23 would be in double digits. Operating margins are expected to remain in the range of 17%-17.5% in the medium term as the amortization of investments made will result in margins to remain below the above-mentioned levels in the near term (2 – 3 quarters).

Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell stocks or MF.

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